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The U.S. would need to rapidly increase EV battery production to meet climate goals

CAMILA DOMONOSKE, HOST:

The Biden administration already had an ambitious timeline for going electric, and then this month, it stomped the accelerator. The EPA proposed new emission standards that are so strict that two-thirds of all new vehicles sold by the year 2032 would likely need to be electric. And to comply, automakers would need a lot more batteries for electric vehicles than the world currently makes. Allan Swan knows a thing or two about making batteries. He's the president of Panasonic Energy of North America, which, together with Tesla, built one of the largest EV battery plants in the world in Nevada. And he joins us now. Welcome to the show.

ALLAN SWAN: Thank you so much. Great to be here.

DOMONOSKE: So if we look at this, these proposed regulations out of the EPA, we're talking about more than a tenfold increase in how many electric vehicles are sold in the U.S. over just a decade. Can companies like yours actually build enough batteries for automakers to pull that off?

SWAN: It's a huge task for everyone to do, and we're going to need everybody in the world to do that. So Panasonic is certainly gearing up for a four or five times growth by 2030, which is quite significant. And I know many of the other players in the market are going to be doing something similar. So it's going to be tight, but we're going to do our best to achieve it.

DOMONOSKE: I want to ask about your previous experience because Panasonic had to ramp up production of electric vehicle batteries very quickly as Tesla's primary battery supplier. What were some of the challenges?

SWAN: Well, as you can imagine, it was - the first gigafactory, as you mentioned, was in Nevada. So it's the first time we'd ever done it. And they basically created a supply chain in a factory, which was pretty cool and a great experience. And we have learned so much from that, both good, bad and ugly, to be honest with you. And we're in a beautiful place because we're a five-year startup sitting inside a 100-year company. And it gave us a lovely balance of being pretty agile and disruptive and, at the same time, being with this hundred-year-old company that had all the robustness that you would expect.

DOMONOSKE: Panasonic has been making batteries for a long time. Why is it hard to just make a bunch more?

SWAN: Because the technology is there for sure. As you mentioned, the difficult part is taking that technology and then scaling it to the level that we are now achieving. And all of that learning we take into, as you know, our new plant, which will be in De Soto, Kan., which will open up at the beginning of '25.

DOMONOSKE: What are some things you're doing differently this time?

SWAN: So the biggest focus we've had, to be honest with you, is about our people. So we're very much focused on having about 4,000 heroes all working together in one direction and knowing how to operate an escalation process because as you do scale up, you can have issues all over the place. So we're very focused on the prioritization and the escalation around that. And then 4,000 people all going in the same direction, you're always going to win in that space.

DOMONOSKE: It seems to me like one of the challenges must be you would always like to hire experienced people to work on a production line. A lot of battery plants going up around the country right now are going in places where there has never been battery production like this. So you simply can't hire experienced workers. Is that right?

SWAN: That is absolutely correct. Yes. In fact, where we are in Reno, Nev., there's not a huge manufacturing workforce there. So we basically had to take people, particularly in tourism and other things, and bring them into this factory and train them. So part of what you were asking about the - you know, what have you done over the last five years? We've put together a huge training plan that can bring anybody, as long as they've got great energy and great enthusiasm, into that factory. We can train them. And we do that through community colleges, as well as universities. So the beautiful thing about this technology is you can give everybody an opportunity to come into this industry, support this industry and be in this industry for a number of years ahead.

DOMONOSKE: Just to zero in here on lithium - right? - critical component of these rechargeable batteries - there is right now only one active exclusively lithium mine here in the U.S. It's also in Nevada, not too far away from your factory, I think. But the availability of qualifying minerals of local, domestic supply - is that going to be a bottleneck as the industry tries to scale up?

SWAN: It's certainly a hurdle to get over for sure. I don't know if it's quite a bottleneck yet, and the reason I would say that is the Department of Energy have been very, very good in supporting companies, giving them loans and other such infrastructure to help them. There's a lot of great things happening in the United States, which will ensure that over the next 10 years to 20 years, we'll look back and see this huge industry, which will be - in 20 years from now, when did it all start? And it started basically now, 2022, 2023.

DOMONOSKE: I talk to a lot of car shoppers, and many of them are very concerned or scared away from electric vehicles because of the price. And the battery is a huge part of the price. We talked about scaling batteries up and localizing production, but they also need to get cheaper for this ambitious goal to be reached. How does that happen?

SWAN: It's a very - you know, it's a demand-and-supply equation. To be honest, it's economy of scale. That's what makes that happen. So the more economy of scale, that will drive the efficiency, which will support, obviously, everything that the government are doing between Department of Energy and between the - you know, things like the Inflation Reduction Act and other such things. So all of that mechanism will help and support the consumer over the next five years to 10 years.

DOMONOSKE: Allan Swan, president of Panasonic Energy of North America, thank you so much for joining us.

SWAN: Thank you very much. Transcript provided by NPR, Copyright NPR.

Camila Flamiano Domonoske covers cars, energy and the future of mobility for NPR's Business Desk.